1. Carlos Eduardo Velez, IADB Dic, 2006
Taller Medición de Calidad de Vida Panel / Concepto General Calidad de Vida
Carlos Eduardo Velez, IADB
Dic, 2006

2. Background in LAC
Multidimensional Perspective with arbitrary agregation
Unsatissfied Basic Needs (Quality of housing, dependence rate, etc.), Humand Development Index
Multidimensional Perspective without agregation
MDGs (highly important for awareness of brader group of policy makers and stake holders)
Multidimensional Poverty Index with more structured aggregation
Theory MDPI, Chrakravarty, Bourguignon, etc
Applications for LAC / presented at the conference “The Many dimensions of Poverty” IPC 2005

3. Illlustrate Application to the Colombia
Percieved well-being shows unambiguos improvement for all Colombians and for the poor.

4. Question-Puzzle PUZZLE: better well-being 1997-2003 despite but
the worst economic recession (1998), that reversed the levels of poverty to 1988 levels.
persistently high levels of violence and insecurity.
but
But with persistent improvements in social indicators (education, sanitation, etc.)
180 degree change of government’s security policy (since late 2002 / President Uribe)

5. Main concerns of Colombians in 2000: violence, employment, education
According to the Latinobarometro surveys [Gaviria (2001) and Caroline Mosser (1999)] Nearly four out of every five Colombians thought that public policy priorities were either
Violence (38%)
Unemployment-income poverty (25%)
Education (15%)
(followed by corruption and low wages)
Source: Velez (2002) Colombia Poverty Report, World Bank.

6. Question-Puzzle

7. Question-Puzzle

8. Question-Puzzle

9. Tri-dimensioal MDP
introducing a more accurate measurement of consumption (one that includes public subsidies of social programs) gives a more consistent picture of the link between changes in well-being and the MDPI.
the degree of consistency is even larger when the welfare weights of non-monetary dimensions -like education and security- are raised vis-à-vis consumption.

10. Conclusion
The results show that parametrizing axiomatically derived MDP indices, while maintaining consistency with evidence on reported well-being of Colombian households, provides a path to derive non-arbitrary weights for the variables included, to avoid arbitrary aggregation procedures, and to reflect more accurately the impact that each dimension of poverty has on the overall wellbeing within the household.